Mexico, Bend homes to be auctioned off -- but much of millions gone

Tami and Kevin Sawyer were booked into the Lane County Jail in Eugene last spring after their federal sentencing on fraud charges

EUGENE, Ore. -

After four years of investigations and court proceedings, 33 fraud victims of former Bend real estate broker Tami Sawyer and her ex-police lieutenant husband, Kevin, finally saw justice Tuesday in a Eugene federal courtroom, as the pair were sentenced to years in prison -- nine for her, two-plus for him -- for fraud, money-laundering and other crimes. Whether and when they might see some or all of the lost millions repaid is still hard to say.

Three months after pleading guilty on the day their trial was to start, after U.S. District Judge Ann Aiken shot down their planned line of defense, the Bend couple, who for years maintained their innocence, also were ordered to repay more than $5.82 million to the investors they defrauded.

Tami Sawyer, 49, pleaded guilty in January to 21 counts of bank and wire fraud, conspiracy and money laundering, her 60-year-old husband to one charge, of lying to a bank on a Bend mortgage application.

As they arrived with family and friends on a blue-sky Tuesday morning at the federal courthouse, the couple declined to comment: "We'd like to, but we cannot,' Kevin said as he headed up the steps.

Once the hearing began, it took hours to get property values decided. Then, before the judge imposed sentence, the once socially prominent couple spoke to those in the courtroom.

Never once apologizing, Kevin Sawyer said he felt awful about what had happened. His wife said something very familiar, and quite similar to a much earlier vow to make good on what they owe. That also was voiced toward the start of this long saga -- before the growing cloud of a federal investigation prompted the pair to plead the Fifth (the right against self-incrimination) in contentious debtors' exams.

"As long as there's breath in my body, they (the investors) will be paid back," Tami Sawyer said in court. "It's our absolute first priority to do that."

Three of their victims read letters in court, emotional speeches in which they asked the judge to impose the maximum sentence. They talked of life savings stolen, of feeling used and betrayed, of lies told and lives ruined.

"This is horrifying, what happened to these victims," Aiken told the pair as family members wept in the courtroom.

Still, at least some of the victims say they don't expect to see much of their money returned. (The couple, earlier given court-appointed lawyers, already had been ordered by the court to reimburse the government for the cost of prosecution.)

"I mean, obviously you'd like to think there's going to be restitution," fraud victim Lori Maunder said afterward. "But from the sounds of what we heard today, there's pretty much nothing left. So you know, it's very tragic for a lot of these families. There were many of us that were hurt, in a lot of different ways."

Anne Marie Amos, a family friend, lost over $800,000 to the Sawyers after promises of an ownership stake in an Indiana housing development turned out to be a mirage.

Instead, the government says her life savings were part of the Sawyers' Ponzi-esque scheme to pay off old investors and fund their lavish lifestyle, including their four-bedroom, $2 million compound in Cabo San Lucas Mexico. Built from the money they bilked, it'll be auctioned off, to help pay back victims.

"It was hard," Amos said after the sentencing. "It was hard to see it, even though I knew it needed to be done. Like I said, I wish we could have done it another way. I don't think without the feds, and without the prison sentence, I just don't think we would have gotten justice any other way."

And what is justice -- getting their money back? Not really, she said -- it was more to keep others from being hurt as they were.

"It wasn't about the money, really," Amos said. "It was more about they didn't continue to do this to other people."

The judge called the case "horrifying," but just one of many that will come out of the real estate collapse across the country -- friends, employees and naive investors who believed they were safely putting their money with a woman who knew the market.

Federal marshals took the couple into custody, and they first will be held at the Lane County Jail. He's likely to go to a federal facility in Sheridan, while she has asked to be sent to one in Dublin, Calif., as there are no women's federal prisons in Oregon. The federal Bureau of Prison will make the final choice.

The Sawyers can appeal their sentences within 14 days, but must continue serving out their prison sentence -- and can't ask for release while an appeal is underway. Once out of prison, they face five years of probation.

It's difficult to get property in Mexico forfeited to the U.S. government, and the Cabo home actually is in the hands of another family who also are Sawyer victims and are trying to auction it off to recoup their own losses.

Still, to help those many victims, there could be other, new victims -- collateral damage, of a sort. The Sawyers also have three Bend rental homes, valued at just over $500,000 total, that will be sold to help pay restitution to victims -- and that means the current renters could have to move. The true market value of those homes was one of the contentious elements of Tuesday's proceedings.

While the couple was ordered to repay restitution, the judge said, "It will be impossible to be paid back" for the damages the couple caused, adding that they "preyed on the community and friends" while diverting money from intended uses to their own personal gain, plus repayments to earlier investors.

Federal officials issued a news release after the sentencing, to make their case that the system had worked, even though it took years for resolution.

“Lying, cheating, and stealing never pays in the end,” U.S. Attorney Amanda Marshall said.

“Individuals like these defendants, who use positions of wealth, prominence, or trust to further their scheme, rob others of more than their hard-earned money and financial independence," Marshall said. "They also rob their victims of their ability to trust others, isolating them in society. This behavior cannot and will not be tolerated, as shown by today’s sentence.”

“The Sawyers used their standing in the community to sell their investors on what was supposed to be a golden opportunity. However, it was an opportunity tarnished by greed,” said Greg Fowler, special agent in charge of the FBI in Oregon. “More than 30 victims have paid the price for that greed, but, today, they can be assured that the court system has delivered on a promise of justice.”

“The IRS is committed to identifying fraudsters who prey on others in order to satisfy their own greed and to working with our law-enforcement partners to shut them down. Hard-working people entrusted Tamara Sawyer with their savings and financial futures, and she violated that trust for her own financial gain,” said Steven J. Bellis, assistant special agent in charge of IRS Criminal Investigation in the Pacific Northwest.

“This sentencing is a warning that being trusted with money from investors carries a duty to the highest standard of conduct, and that willfully ignoring that duty carries severe consequences,” Bellis added.

During the sentencing hearing, federal prosecutors, outlined the challenges they have faced in learning just how much money the pair -- who have kept on spending -- have to repay millions to those victims.

Scott Bradford and Amy Potter, the two assistant U.S. attorneys who have overseen the case, acknowledged it will be difficult to get full restitution for the 33 victims the Sawyers were indicted on, as it's been very hard to track the funds, and difficult to obtain the Mexican property for use in restitution.

Meanwhile, they said, even after the Sawyers entered guilty pleas in January, the couple has been spending money they don't have, even racking up insufficient funds charges. The day before their possible trial led to a plea deal in January, they spent $1,000 on clothing, they said.

Kevin Sawyer's attorney, Shawn McCrea, told the court he wasn't fully aware of the fraud, but believed in his wife and that she knew what she was doing with the business.

McCrea also argued the former police officer will be too vulnerable in prison and noted the good works he did in the community before resigning his position. The lawyer also noted that Kevin Sawyer, if in prison, couldn't work to pay the restitution, as he's been doing.

Tami Sawyer pleaded guilty Jan. 15 to all 21 fraud, conspiracy and money-laundering charges, heading off a trial with a plea deal after the judge ruled their lawyers could not present their planned defense – that they had assets to pay back investors.

Kevin Sawyer pleaded guilty only to one count, of making false statements to a financial institution to obtain a mortgage in 2007 to buy a home in northeast Bend by intentionally misrepresenting assets, liabilities and the source of the down payment.

Prosecutors said the Sawyers enticed more than 30 people to invest more than $7 million between 2004 and 2009 by falsely promising high rates of return, usually 12 percent, and securing those investments with promissory notes.

But rather than invest the money as promised, Tami Sawyer used it to fund their other companies and ventures and on personal expenses, including car credit card payments and construction of their vacation and rental home in Mexico.

That caused investors to lose more than $4.4 million, the feds said at the time of the January plea deal.

The couple agreed to forfeit much of their property, including the home in Mexico, and to pay full restitution to their victims.

They were allowed to travel to their home in Mexico at least six times while awaiting trial, but were forbidden from traveling abroad after their plea.

But the Sawyers’ guilty pleas were conditional, keeping alive the pair’s ability to appeal Aiken’s ruling disallowing their planned defense.

By the way, a criminal conviction does not preclude Kevin Sawyer from collecting the pension he earned in almost 30 years as a Bend police officer, a state Public Employee Retirement System spokesman told The Bulletin in January.

Meanwhile, a hearing is scheduled to resume Friday in Bend on a defense motion to dismiss 2-year-old state charges of felony first-degree criminal mistreatment and aggravated theft against her.

The charges stem from her relationship with Thomas Middleton, of the investors in her company Starboard LLC who suffered from Lou Gehrig’s disease. She was successor trustee for Middleton’s trust, and prosecutors say after his 2008 death, she sold his home and deposited the proceeds in Starboard’s bank account, transferring $90,000 of that to two other companies she owned.

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